Exploring the Membership Economy with Robbie Kellman Baxter

It’s no secret that most, if not, all businesses rely on repeat customers in order to be successful. But how do you turn a one-time transaction into a forever transaction? The answer – a “membership” business model focused on building ongoing, formal relationships with the people you serve.

Robbie Kellman Baxter, founder of Peninsula Strategies, LLC and author of The Membership Economy (available on Amazon and other major book sites), is an expert consultant in how to accomplish this. She has examined the massive transformation that is occurring which makes it possible for almost any organization, in any industry, to now turn ordinary customers into lifelong members.

In this episode of the Leading Learning podcast Celisa talks with Robbie about the membership economy overall, how it is impacting associations, and the role that learning and education should play related to it.

To tune in, just click below. To make sure you catch all of the future episodes, be sure to subscribe by RSS or on iTunes. And, if you like the podcast, be sure to give it a tweet!

[00:55] – A preview of what will be covered in this podcast where Celisa Steele interviews Robbie Kellman Baxter, author of The Membership Economy.

[02:33] – Introduction to Robbie and some background information about who she is and what she does.

The Membership Economy

[04:24] – Would you explain what you mean by the term “the membership economy”? Robbie explains it is a massive transformation that we are seeing across virtually every kind of industry with a shift in emphasis from ownership to access, from the anonymous transaction to the known relationship, from one-time payments to recurring payments, and from one-way communication to multidirectional communication. She says when you look at these four changes, there is tremendous opportunity for disruptive entrance into every type of space -and she calls this transformation, “the membership economy”.

[05:33] – What are the factors that have brought about the membership economy? Robbie shares there are two things – technology and money – and she talks about how and why these have brought this about.

[07:45] – In your book you claim that the shift to the membership economy is as profound as the shift to the Industrial Revolution. Can you say a little more about that? Robbie says that when she looked at how manyorganizations are changing and how rapidly this change is coming about, it’s not just changing the way we as business professionals think, but also the way that human beings (our members) expect to be treated. We don’t have to depend on physical proximity and be in the same time and space to have a trusted relationship anymore. This creates all kinds of new possibilities for how people can interact with the organizations that serve them, which is a big deal.

[08:54] – Many of the Leading Learning Podcast listeners work for trade associations or professional societies, organizations that are membership-driven. How is the advent of the membership economy impacting associations? Is this an opportunity or a threat? Robbie admits that it’s actually both. She says the threat is that organizations that have historically not been able to build a business model that works on loyalty and long-term relationships are suddenly able to. And they are fighting for mind share because, as she points out, you can only really be engaged in so many membership organizations at one time. With Facebook and LinkedIn, as well as content marketing, people can now receive services/content for free that have previously been the source of revenue for a lot of associations.

[10:53] – Robbie talks about the opportunity that exists because of the membership economy stating that nobody understands membership like professional associations/societies. She says they have the expertise, relationships, and credibility with the people, which gives them a huge head start over the new entrants. The biggest weakness she sees among new entrants (most of which are for-profit) is, even though they talk a big game about membership, they are very focused on acquisition and they tend not to be very good at retention. There is an opportunity if organizations that really understand building relationships get better at leveraging new technology and evolving their offerings to stay current. This will help them to both keep their existing members and bring in new members through the credibility they have through word-of-mouth and existing relationships.

[12:28] – In your book, you referenced an example of a question that Dawn Sweeney, CEO of National Restaurant Association, would periodically ask her team – “If you wanted to put us out of business, what would you do?” which is a fascinating exercise as a way of dealing with the membership economy. Robbie explains that what ends up happening is that organizations are picking off the most profitable areas and coming up with something that’s totally different and might be serving the greatest needs of that professional or trade community. She adds that is good to also ask where you can have the biggest impact on your mission, noting that one challenge she’s noticed in a lot of associations she’s worked with is that people in leadership believe their job is to make sure the association continues to serve people like them, instead of making sure they achieve the mission of the organization.

[15:58] – What role do you see learning and education playing in the membership economy, or what role do you think they should be playing? Robbie recommends a couple ideas to think about related to this:

Beyond the people who are members today, what is the learning and education that is needed for the members of tomorrow?Focus on who is it you want to attract and what it is they need to be successful.

Take a lighter and more agile approach to the creation of learning and educational programs. In other words, don’t be in the business of having courses X, Y, and Z, but rather be on the cutting edge of what nobody else is providing for members. Robbie emphasizes that you can’t bet too heavily on a product because you’re not in the product business, you’re in the membership business.

[18:58] – A further discussion about the importance of delivering on your mission, not just a product. Robbie adds that there’s always something that people need to learn and she gives a few examples of this.

[19:52] – What do you see on the horizon—more of the membership economy or do you see another big shift coming? Robbie shares that the membership economy is really just building momentum and in her opinion, it’s just getting started.

[21:01] – What’s your approach to your own lifelong learning? How do you keep learning and growing your knowledge and skills? Robbie says that because she works for her own firm, there’s no built-in professional development so she has to be proactive to continue to develop her own skills and knowledge. She sets aside a budget each year (in dollars and time) towards professional development and makes a business plan that includes professional growth. She is also in a mastermind group and tries to read a business book each week.